On 1 October 2014, during a session of the Parliament of Georgia, Parliamentary Majority MP, Zurab Tkemaladze, talked about the on-going processes in the business sector. He also mentioned the issues of unemployment and wages and pointed out that there has been a substantial rise in wages in different sectors of the economy.

FactCheck

took interest in this statement and verified its accuracy.

According to the data of the Public Register National Agency, the number of newly registered enterprises equalled 24,922 in the first six months of 2012 whilst a total of 25,128 new enterprises were registered in the same period of 2011. These numbers decreased to 24,089 in 2013 but increased again by 737 and amounted to 24,826 in 2014. The number of newly registered enterprises has indeed increased as compared to the previous year but it is still low as compared to the numbers of 2011 and 2012.

Chart 1:

 Registration of New Enterprises from 2010 to 2014

Source: Public Register National Agency

According to the data of the National Statistics Office of Georgia, a total of 588,782 enterprises were registered in Georgia as of 1 September 2014 and only 19.2% (113,017) were active. Trade and household items repair companies have the biggest share in these enterprises (44.6%). Real estate operations occupy the second position (9.1%) whilst manufacturing holds the third place (7.9%).

Chart 2:

 Active Enterprises by Types of Activities

Source:  National Statistics Office of Georgia

The turnover of the business sector equalled GEL 21.1 billion in the first two quarters of 2014 which is 14.2% more than in the same period of the previous year. GEL 11.1 billion of this turnover was attributed to trade and household items repair, GEL 4 billion to manufacturing and GEL 2.4 billion to transport and communications.

The number of people employed in the business sector was equal to 507,610 in the second quarter of 2014 whilst the number was 503,456 in the same period of the previous year. Hence, the employment growth in the business sector is under 1%. The biggest share of the labour force was employed in the fields of trade (22.7%), manufacture (21%) and healthcare (11.3%).

As for wages, the average monthly wage of employees amounted to GEL 864.4 in the second quarter of 2014 which is 8.5% higher than it was in the same period of the previous year. The highest growth was recorded in the field of agriculture (20.3%), next being the mining industry (15.7%) and hotels and restaurants holding the third place (10.4%).

Chart 3 depicts the growth of wages in the segments of the economy where most of the labour force is employed in the second quarter of 2014.

Chart 3:

 Growth of Wages by Sector from 2003 to 2014*

Source:  National Statistics Office of Georgia

Conclusion

A total of 24,826 new enterprises have been registered in Georgia in the first six months of 2014. As for the turnover of the business sector, it amounted to GEL 21.1 billion in the first six months of 2014. The highest turnover was recorded in the fields of trade (GEL 11.1 billion), manufacture (GEL 4 billion) and transport and communications (GEL 2.4 billion).

As for wages, the average monthly wage of employees amounted to GEL 864.4 in the second quarter of 2014 which is 8.5% higher than it was in the same period of the previous year. The highest growth was recorded in the field of agriculture (20.3%), next being the mining industry with 15.7%.

FactCheck concludes that Zurab Tkemaladze’s statement: “Wages in the fields of agriculture (20.3%), the mining industry (15%), hotels and restaurants and the food processing industry (10%), healthcare, education and trade (9%) have increased significantly. A total of 24,800 new businesses have registered in the first six months of 2014 which is 737 more than that of the previous year. The turnover in the business sector exceeded GEL 21 billion in the first six months of 2014. The turnover in the field of industry exceeded GEL 4 billion,” is TRUE.